US Dollar strengthens after Federal Reserve raises interest rates

US Dollar strengthens after Federal Reserve raises interest rates

The US Dollar continued to strengthen against other major currencies in the Asian trading session recently, after the US Federal Reserve raised its key interest rate for the first time in a year and also hinted at a more aggressive pattern of rate increases in 2017. The Fed on the 14 December raised its key interest rate for the second time in a decade, by a quarter of a point from 0.5% to 0.75%.

Markets are likely to take the US rate hike in their stride as a further increase to the base rate has been expected for some time. The Fed’s ‘dot plots’ now predict three rate hikes in 2017, one more than previously estimated.

Meanwhile, crude oil delivery for January is currently down 0.03% to 51.01 per Barrel. Crude oil futures fell as the US government reported a build in oil inventories.

The key data to look out for today is the BoE interest rate decision with the likelihood that the Bank of England will remain at a stalemate with unchanged interest rates for the foreseeable future.